January 4, 2002
Volume V, Issue 2
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To OTC Journal Members:

Quick Note- Before deciding if you want to participate, please read the OTC Journal's section on Trading Alerts found on the left hand menu bar of our home page. For a Track Record of former Trading Alerts, Click Here.

Trading Alert- Dupont Direct Financial Holdings (OTC BB: DIRX)

Our last Trading Alert on November 5th was Cross Media Marketing at $6.70. The stock traded up to $7.90 for an 18% return within five days of our release, making many of our members very happy with a nice short term gain. More importantly, just two short months later, the stock hit the $11 today, for a solid 60% gain!!!!!!

In keeping with our 2002 policy of finding companies with accelerating earnings, today's trading alert, Dupont Direct Holdings (OTC BB: DIRX), made an announcement after the market closed today which we believe will be the first step towards putting this company investor's radar screens.

The company announced dramatic earnings acceleration, and the OTC Journal believes the stock is undervalued based anticipated December quarterly performance.

Dupont Direct Holdings is a publicly traded brokerage firm which specializes in managing fixed income assets for institutions and high net worth individuals. Through a unique expertise, the company has developed exciting methods for enhancing yields on low risk bond portfolios. Business at the company is accelerating rapidly as evidenced in today's press release, and we believe their growth will continue.

The company made its press release after the market closed today giving every investor equal opportunity to evaluate and digest this news before the market opens on Monday. We expect the stock to open with a bang, and hopefully trade higher over the coming weeks.

The company announced earnings for the December quarter (3rd fiscal quarter) would be record breaking. Two of their three divisions had record revenues and profits. The third division was profitable, but not record breaking.

Based on conversations with representatives of the company, the OTC Journal estimates profits between $.4 million and $.5 million, which translates to about $.03 per share for the quarter alone. Dupont earned $.02 per share over the first two quarters of their fiscal year, meaning the company's earnings growth rate is somewhere in the 100% range.

Moreover, if the company earns $.03 per share in the quarter, annualized earnings with no further growth would be $.12 per share. The stock closed today at $.70. A simple move to a PE of 10 times current earnings would put the stock at $1.20, a 71% return from today's closing price.

Over the next several months we could see this stock easily to the $2 level or higher if earnings continue to accelerate at the current pace which would yield a substantial return for investors in at $1 or less.

Trading Alert Details

Here are our thoughts on this Trading Alert on Dupont Direct Financial Holdings (OTC BB: DIRX)

  • Buy up to $1.00 which is a very reasonable level to own a stock potentially on track to earn $.12 per share. If earnings acceleration continues, $2 should be in range over the next several months as more investors learn of this company's success.
  • Set your Stop Loss at $.65 to give you some room for a short term pullback or what ever your risk tolerance is.
  • Look for a short term move to $1.20 if the stock can get through $1. in the next few weeks should go higher it could find its way higher with a little luck and favorable market conditions. A move to $1.20 would place the stock 70% above today's closing price.
  • Because of their growth and profitability you can comfortably put this one in your long term speculative portfolio.

The OTC Journal intends to publish follow-up editions on this company. This stock has the potential to be a huge winner.

This newsletter is our opinion only, and not a solicitation to buy this stock. Make up your own mind. If you are looking for a short term trade limit your loss if the stock goes against you. As always, we remind you before making any investment decisions please review the section on our home page on Trading Alerts. Read our section on Successful Microcap Investing, paying particular attention to the Trading Strategies Section. The track record on our previous alerts can be obtained by clicking here.

Here is the complete text of today's news release for your review:
Friday January 4, 5:20 pm Eastern Time
Press Release
SOURCE: Dupont Direct Financial Holdings, Inc.

DIRX Announces Third Quarter Outlook

NEW YORK--(BUSINESS WIRE)--Jan. 4, 2002--Dupont Direct Financial Holdings, Inc. (OTCBB:DIRX - news), today announced its 3rd Quarter outlook from operations. 

Randy Strausberg, CEO and Chairman of the Board of Dupont said, ``The preliminary results from two of Dupont Direct's three revenue centers, riskless-principal customer-driven transactions and funds management reflect record quarterly revenues and profits since the Company was reorganized into a financial services holding company in May 2000 and in these areas the month ended December 31, 2001 was a record. And while not a record, the third revenue center, stock brokerage and trading, also contributed a profit to operations. 

Randy Strausberg continued, ``We had one of our best operating months since we assumed control of the Company. This is good news for our shareholders and represents a very strong performance following the disruption to business stemming from the September 11th terrorist attacks. We are very pleased that all profit centers of our business are contributing.'' 

Dupont Direct Financial Holdings, Inc. provides a range of services to institutions, other broker/dealers, Native Americans and high net worth individuals. Principal services include fixed income execution services, funds management and corporate finance. Dupont is a broker-dealer member of NASD and SIPC. It currently has offices in New York and Texas. 

Certain statements contained herein constitute ``forward-looking statements'' within the meaning of the Private Securities Reform Act of 1995. Such forward-looking statements involve a number of known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements of the Company to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, but are not limited to, changes in the markets for the Company's products and services, regulatory and economic factors, economic cyclicality, competition, litigation, client or customer arrangements that may expand or contract, adverse weather conditions, possible technological advances or obsolescence in existing or future products or services, the variability in the value of the Company's securities inventory products, customer concentration and other risks detailed in the Company's other periodic reports filed with the United States Securities and Exchange Commission (SEC or Commission). The words ``believe,'' ``expect,'' ``anticipate,'' ``may,'' ``plan'' and similar expressions identify forward-looking statements, which speak only as of the date the statement was made. 

     Dupont Direct Financial Holdings, Inc.
     Jon Bloomberg, 917/320-4800

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We encourage our readers to invest carefully and read the investor information available at the web sites of the Securities and Exchange Commission ("SEC") at and/or the National Association of Securities Dealers ("NASD") at We also recommend that you read the SEC advisory to investors concerning Internet Stock Fraud, which can be found at Readers can review all public filings by companies at the SEC's EDGAR page. The NASD has published information on how to invest carefully at its web site.

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